Nigeria Opens N150bn Ijarah Sukuk for Subscription
In an effort to support government capital spending, Nigeria’s Debt Management Office (DMO) has opened N150 billion Ijarah Sukuk, an Islamic bond, worth N150 billion for subscription from capital market investors.
According to a statement by the DMO, the Sukuk is issued by the Federal Government of Nigeria (FGN) Roads Sukuk Company PLC, on behalf of the Federal Government. It said that the Sukuk were offered at N1,000 per unit, subject to a minimum subscription of N10,000 and in multiples of N1,000 thereafter.
The sukuk document indicates that rental payment is made half-yearly, and bullet repayment is done on the date of maturity. DMO revealed that proceeds will be used solely for the construction and rehabilitation of key road projects and bridges across the six geopolitical zones of the country.
It added that the Ijarah Sukuk was backed by the full faith and credit of the Federal Government. It qualifies as securities in which trustees can invest under the Trustee Investment Act.
“Qualifies as government securities within the meaning of the Company Income Tax Act and Personal Income Tax Act for tax exemption for pension funds among other investors. #Naira Devaluation Deepens Economic Crisis in Nigeria
“To be listed on the Nigerian Exchange Limited and FMDQ Securities Exchange Limited,” it said. It added that the Ijarah Sukuk was classified as a liquid asset by the Central Bank of Nigeria (CBN) and certified by the Financial Regulation Advisory Council of Experts of the CBN.
The Sukuk is a Sharia-compliant instrument that represents the interests of the owner in an asset or pool of assets. It ensures that every financial activity is backed by real economic activity, is usually linked to specific infrastructure projects.
